9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (2) TMI 624 - AT - Income TaxEntitlement to deduction u/s. 80P(2)(a)(i) denied - as per AO assessee was primarily engaged in the business of banking and therefore, in view of the provisions of section 80P(4) which was inserted with effect from 01.04.2007, the assessee was not entitled to deduction u/s. 80P - Held that - Admittedly, the assessee is primary agricultural credit society registered under the Kerala Cooperative Societies Act, 1969. The Hon ble High Court of Kerala in the case of Chirakkal Service Co-op Bank Ltd. 2016 (4) TMI 826 - KERALA HIGH COURT had held that a primary agricultural credit society, registered under the Kerala Cooperative Societies Act, 1969 is entitled to the benefit of deduction u/s. 80P(2). Thus we hold that the assessee-society is entitled to the benefit of deduction u/s. 80P of the Act Validity of certificate issued under the Kerala Co-operative Societies Act, 1969, categorizing the assessee as a Primary Agricultural Credit Society (PACS) - Held that - In the instant case the classification of assessee-society as PACS is admittedly done by the Joint Registrar of Co-operative Societies, who is a competent authority under the KCS Act. The certificate stating that the assessee is classified as a Primary Agricultural Credit Society was issued by the Assistant Registrar. Therefore, the classification was not done by the Assistant Registrar, hence the certificate issued is valid as per law. Hence, grounds raised by the Revenue are dismissed.
Issues:
- Entitlement to deduction u/s. 80P(2)(a)(i) of the I.T.Act - Validity of certificate issued under the Kerala Co-operative Societies Act, 1969 Entitlement to deduction u/s. 80P(2)(a)(i) of the I.T.Act: The appeal revolved around whether the assessee, a primary agricultural credit society, was eligible for deduction u/s. 80P(2)(a)(i) of the Income Tax Act. The Assessing Officer denied the deduction, citing the assessee's engagement in banking activities. However, the CIT(A) ruled in favor of the assessee, referencing the judgment of the Jurisdictional High Court in a similar case. The High Court had held that primary agricultural credit societies registered under the Kerala Cooperative Societies Act are entitled to the deduction. The ITAT Cochin concurred with this decision, emphasizing that the assessee satisfied the criteria for being classified as a primary agricultural credit society, thereby allowing the deduction under section 80P of the Act. Validity of certificate issued under the Kerala Co-operative Societies Act, 1969: The Revenue challenged the validity of the certificate classifying the assessee as a Primary Agricultural Credit Society (PACS) under the Kerala Co-operative Societies Act, 1969. The Revenue argued that the certificate should have been issued by the Registrar, not the Assistant Registrar. However, the ITAT Cochin clarified that the Joint Registrar, empowered by a government notification, had the authority to classify the society as a PACS. As the certificate was issued by the Assistant Registrar based on the Joint Registrar's classification, it was deemed valid. Therefore, the grounds raised by the Revenue regarding the certificate's validity were dismissed. The ITAT Cochin upheld the classification and subsequent deduction for the assessee as a primary agricultural credit society. In conclusion, the ITAT Cochin dismissed the Revenue's appeal and the Cross Objection filed by the assessee, affirming the entitlement of the assessee to the deduction u/s. 80P(2)(a)(i) of the Income Tax Act. The judgment highlighted the significance of proper classification under the Kerala Co-operative Societies Act for determining eligibility for tax deductions, ultimately upholding the decision in favor of the assessee based on legal provisions and precedents.
|
